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@ matata
2023-07-11 15:56:07
This mini-guide aims to help you choose between a selection of Bitcoin lightning network (LN) wallets with an additional focus on working toward becoming unruggable through self-custody. No need to overthink, self-custody means: writing down and safely storing 12/24 words (aka 'seedphrase') offline, on paper/metal.
TL;DR. use WoS/LN.tips (transact📱) x Phoenix (save📱, self-custodial)
LN wallets (a selection)
Self-custodial LN wallets:
a. Phoenix app (📱, acts as a LN node*)
b. Breez (📱, acts as a LN node*)
c. Muun (📱, acts as a LN node*)
d. Zeus (📱, LN url)**
Custodial (by default) LN wallets:
a. Alby (browser extension, LN url)**
b. LN.tips (Telegram bot, LN url)**
c. Wallet of Satoshi (📱, LN url, use fresh email to sign-up)
d. ZBD (📱💻, LN url, kyc-free up to 500k sats)
sats= satoshi's (fractions of a bitcoin, e.g. 21.000 sats is 0.00021 BTC) LN url = Lightning address to add to your Nostr account to enable >receiving< Zaps
uses e.g. a big company LN node or submarine swaps *lightning node remote control apps: can also connect to self-hosted LN node
So to be clear, you have lightning wallets that act as (a) a wallet, (b) a self-custodial lightning wallet AND a lightning node on your phone, (c) a lightning node remote control app (if you run and self-host a LN node on a dedicated device).
Why choose custodial? It is only a temporary solution showing the power of LN where channels are already established and robust, is my conclusion. Be aware that there are major security/privacy trade-offs when using custodial wallets. However, if you're someone who's new to Nostr and/or bitcoin, and you e.g. want to enable receiving Zaps, it's obvious you play around with a custodial one with a smaller amount of sats first (let's say, up to ~ 21k sats/ 50$). I don't think it's realistic to expect someone new to this network to magically and instantly know how to spin up a LN node and manage channels. This is something that takes time to learn.
Unless you only use self-custodial LN wallets, it is advised to have your sats divided on more than one custodial wallet in case one of the hosted LN nodes temporarily goes down (not often) and you still want to transact at that moment.
Why choose self-custodial? When you're looking to learn more and/or if you plan to send/receive more substantial amounts of sats (e.g. for business) then you're ultimately going to want to learn to run a self-hosted node, preferably through Tor. Find trustworthy tutorials here.
A self-hosted node allows you to save on transaction fees; truly be in control of your bitcoin; and, protect yourself wrt third-party privacy violations. Know that you'll have to invest some time in learning and money in gear/gadgets in order to run your own (LN) node (~$200-$400).
What other choices do I have? If you're not ready to run a LN node just yet, you can also choose to go for one of the self-custodial wallets listed that act as a LN node on your mobile (e.g. Phoenix). The transaction fees are a bit higher than with custodial wallets but this is related to the wallet acting as a lightning node on your phone (e.g. with Phoenix you have to top-up the wallet with a minimum of 10.000 sats initially of which 3000 sats will be deducted in order to have the system open up lightning channels for you). A small price to pay for not having to have to run your own, self-hosted Bitcoin Lightning Node and managing it. Know that running your own lightning node has similar costs.
Tip: You can now deposit funds to self-custody on Lightning with Phoenix wallet for less than 500 sats when conditions are optimal* (compared to the previous 3000 sat/1%). They also made the LN<->onchain swaps trustless.
Summary
Here's a recommended Bitcoin wallet setup focussed on self-custody without having to have to run your own, self-hosted Bitcoin LN node:
Transacting bitcoin LN/L2 (active📱): Wallet of Satoshi and LN.tips
only use temporary, small amount of sats; custodial, but supports LN url
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Saving bitcoin, LN/L2 (passive📱): Phoenix wallet
self-custodial, easy, can swap LN↔on-chain, supports Tor
watch and learn: https://youtu.be/cbtAmevYpdM?t=223
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Saving bitcoin, Layer 1 aka on-chain (passive💻):
deep, air-gapped, cold storage (e.g. Seedsigner, Coldcard)
For a more extensive LN wallets comparison guide outside the scope of only Nostr, click here (would not recommend if you're new to all this; can be overwhelming).
Link to this blog: https://lnshort.it/lnwalletguidenostr
Find me on Nostr: matata@nostrplebs.com